The Good, The Bad, and The Ugly: The Economy is Struggling, But There Are Some Bright Spots
More jobs numbers today and, as has been the case for the last long while, the results are a mixed bag.
Applications for unemployment benefits went up by 38,000 for the week ending January 26, bringing the figure to 368,000. However, the four-week average was 352,000, which is actually a four-week low.
“The volatility reflects the government’s difficulty adjusting the data to account for layoffs after the holiday shopping season. Job cuts typically spike the second week in January as retailers dismiss temporary employees hired for the winter holidays. Layoffs then fall in the second half of the month,” writes USA Today.
The article references analyst predictions that, for the month of January, 155,000 jobs were added and the unemployment rate will remain at 7.8 percent.
The last jobs figures for the black population earlier this month show a rise in unemployment, with joblessness among African Americans reaching 14 percent in December. It was 13.2 percent in November.
These figures show persistent economic softness, which isn’t helped by the rising cost of some items, and rising taxes. Social Security payroll taxes rose back to 2010 levels at 6.2 percent this year, which is biting into middle and lower income budgets.
Then, in case you’re still sending things via snail mail (every once in a while, I guess you have to), a first-class stamp is now 46 cents.
More significantly, fees for credit card use can now be levied in 40 states. Individual businesses in these states can choose to charge four percent more if a customer uses a credit card. The new charge is the result of a $6 billion settlement between the banks, credit card companies, and merchants. The fee is equal to the cost of accepting the card. Reuters points out that the fee is illegal in a number of states including New York and California.
But not everything is so doom and gloom. Thirteen states, including New Jersey and Maryland, have put minimum wage increases in place. The federal minimum wage is $7.25, but places like Rhode Island have a minimum of $7.75. “A 2011 summary from the Bureau of Labor Statistics reports that 73.9 million American workers over the age of 16 were paid at hourly rates, of which 1.7 million earned minimum wage,” writes USA Today in a separate article.
New Jersey’s Gov. Chris Christie rejected a proposal to raise the minimum wage in his state bu $1.25 immediately, instead proposing a dollar increase phased in over three years. Democratic Senator Tom Harkin has suggested a federal minimum wage increase to $9.80 over three years along with cost of living adjustments. Some say the increased wages would put businesses, particularly small businesses, in a bind. But the article says the increases reflect a “transition” from recession to an economy in recovery.
In fact, CNNMoney says the economic turnaround is so positive, it’s part of the reason energy prices are going up. Although it’s expected that, for the year, the price of gas will top out at $3.25 to $3.50 per gallon, lower than last year’s average. Housing prices, construction and other indicators are also pointing in a positive direction.
A quick look online shows that while there are signals that the economy is coming around, it’s still a slow, hard slog that’s going to require diligence, good policy, and strategy on a national level. It’s going to require the same thing individually in our personal bank accounts and budgets.